To update prices and add analyst commentary

May 29 (Reuters) - Gold prices edged higher on Friday as investors followed reports of a deal between the United States and Iran, amid growing concerns about inflation and rising U.S. interest rates.

By 0422 GMT, spot gold had risen 0.3 percent to $ 4,505.57 an ounce. However, the precious metal was down about 0.1 percent since the start of the week.

U.S. gold futures rose 0.1 percent to $ 4,535.90 .

Gold prices fell to a two-month low on Thursday before closing higher after reports of an extension to the ceasefire between the United States and Iran.

Brian Lan, managing director at GoldSilver Central, said, "Yesterday we saw gold drop to $4,360, and it was likely to continue falling until the (ceasefire) news came out, which led to a sudden shift in prices. That's where the market is still this morning."

He added, "The markets are now waiting for the agreement to be signed, even if it only depends on Trump's signature."

Sources told Reuters that the two countries reached an agreement yesterday to extend the ceasefire and lift restrictions on navigation through the Strait of Hormuz, but US President Donald Trump has not yet approved it, and Iranian state media said that the final touches have not yet been put on it.

The US inflation rate rose in April at its fastest pace in three years, driven by higher energy prices due to the war with Iran, reinforcing economists' expectations that US interest rates will remain unchanged until next year.

John Williams, president of the Federal Reserve Bank of New York, said the U.S. central bank's monetary policy is moving in the right direction given the outlook, adding that he expects inflation to be high in the near term with pressures easing later in the year.

As for other precious metals, silver settled in spot trading at $ 75.61 an ounce, and palladium rose 0.5 percent to $ 1,375.63 , with both metals on track for weekly gains.

Meanwhile, platinum lost 0.4 percent to $1,914.95, on track to record a weekly loss.